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Leaders have an outsized impact on organizational success, but if their behaviors don’t align with your culture, that impact can push the entire organization off track. Here are four leading indicators that it’s time to re-assess the way you define and support leadership.
Leadership development is a $50 billion market and growing, and it's not hard to see why. According to Gartner, HR leaders identified leader and manager effectiveness as the top priority for 2023. As leadership scholars Kelloway & Barling put it, “Virtually every outcome variable in the field of occupational health psychology is empirically related to organizational leadership.”
In this blog post, we’ll look at the warning signs that indicate a need for new leadership styles and behaviors along with tools and approaches to help you redefine and re-align leadership.
Leadership has an outsized influence
Every employee has the potential to influence organizational outcomes, but for leaders, that influence is significantly greater. Poor or misaligned leadership can negatively impact productivity, turnover, financial performance, morale, and customer satisfaction. Conversely, good leaders increase employee productivity, engagement, and wellbeing, improve organizational resilience, and boost bottom-line financial performance.
Because of its profound impact on the employee experience and organizational outcomes, leadership performance needs to be closely and continually monitored. Being able to identify the leading indicators of underperforming or misaligned leadership enables talent managers to address the issue quickly and minimize the consequences.
When to assess leadership
The warning signs for mis-aligned or underperforming leadership are not always easy to spot. As we saw during the pandemic, issues such as low retention and poor financial performance can be caused by any number of socioeconomic factors that are beyond a leader's control. Similarly, it's possible for a company to post record profits even as its future success is being quietly undermined by poor morale.
However, there are four scenarios that can indicate a need to re-evaluate the way your organization defines and supports effective leadership.
"We have lost touch with our values."
Companies change over time, and so do the values that guide them. If your leaders and employees are no longer clear on the values and priorities that inform decision-making, it is time to examine those values to ensure they are clearly defined and aligned with the mission and vision.
"We have culture or performance issues."
If the company is not hitting its performance targets, or if the workforce demonstrates greater volatility or dissatisfaction (such as an uptick in attrition rates, lower 360 review scores, or an increase in issues brought to HR for resolution), it's time to re-align leadership competencies and proficiency levels with employee and organizational needs.
"We are facing rapid growth."
You don't need to wait for a symptom of poor leadership quality to arise before taking the initiative in re-examining leadership competencies. Any fast-growing company will need to actively protect leadership quality by either documenting successful leadership styles in a repeatable format or adjusting those leadership styles to ensure leaders are ready to embrace growth.
"We are facing big changes."
Companies adapting to new industry, market, or economic realities need leaders who are ready to set new priorities and embrace new approaches. Going through a merger or acquisition, pivoting from brick-and-mortar sales to ecommerce, or breaking into new markets are all examples of changes that need to be reflected in leadership. Establishing the right competencies gives leaders a blueprint to help them focus on what's important and identify areas for further development.
How to re-align leadership
There is no universal template for leadership excellence. Good leadership looks different in every organization because it aligns with the organization’s unique culture. Leadership is guided by the organizational culture, and it also helps to define it. That culture, in turn, guides the day-to-day decisions and behaviors for every member of the organization, from leaders to front-line workers.
The process of re-aligning leadership always starts with an examination of the organizational culture. Once the desired culture is identified, you can select a leadership model that supports it and begin building a deeper leadership profile capable of guiding the day-to-day behaviors of your leaders.
Define and assess the culture
Any effort to improve leadership performance needs to start with defining and assessing the culture. What does that culture look like? What values should the organization embody? What change does the organization want to make in the world?
The next step is to determine how close the organization is to achieving the desired culture. This can be explored through:
- Workshops and discussions with leaders
- Focus groups and anonymous surveys with employees
- Surveys, interviews, and data from customers
Select a leadership model
Once you have a clear understanding of the current state, you can turn your focus toward selecting a leadership model that supports the desired culture. (The Ivey Academy lists the 12 recognized leadership models here.) The leadership model gives your leaders a concise description of the key traits that define the desired leadership style. Together with the organizational culture, the leadership model acts like the North Star for your leaders—a clear direction to follow and a destination to aspire to.
Create a leadership competency profile
Many talent managers stop once the leadership model has been identified, but there is a final and crucial step. While the model defines the desired leadership approach in broad strokes, it doesn’t provide the level of detail needed to put the model into practice. This is where the competency-based leadership profile comes into play.
A competency profile defines the abilities, skills, knowledge, motivations, and traits needed for successful job performance. Most importantly, these elements are described in terms of observable, measurable behaviors. In effect, the leadership competency profile translates the leadership model into a blueprint that leaders can use to guide their behavior on the job. It also provides HR with a talent management tool that can be used to assess leaders, identify areas for further development, and support optimal performance.
Continue the learning
For a step-by-step guide to creating effective, actionable, competency-based leadership profiles, download your copy of "Defining and Supporting Leadership with Competencies". the latest eBook from HRSG. You’ll learn how to develop competency profiles that align with your organization’s culture and goals and drive effective leadership throughout the talent lifecycle.